NEW YORK, June 8 (Reuters) - U.S. and European stocks declined on Monday as investors fretted about Greece and the timing of a U.S. rate hike, while bond yields rose and the dollar fell.

The U.S. currency extended its decline in the afternoon even after President Barack Obama denied a wire-service report that claimed to cite his remarks on the greenback’s strength.

Investors sold U.S. equities after Friday’s strong jobs report heightened expectations for a Federal Reserve interest rate hike as soon as September. Several experts said markets would likely remain choppy ahead of a rate hike.

“Volatility is apt to increase in July and August as the market moves through the historical dog days of summer, waits for the second-quarter results and, importantly, transitions to a likely Fed move in September,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

The Dow Jones industrial average was off 78.91 points, or 0.44 percent, at 17,770.55, the S&P 500 lost 12.83 points, or 0.61 percent, to 2,080 and the Nasdaq Composite dropped 53.32 points, or 1.05 percent, to 5,015.14.

Greece’s bailout program also weighed on markets as it expires at the end of June and the country faces potential default on its debts.

Greek officials met on Monday with EU Economics Commissioner Pierre Moscovici on what reforms Greece must implement to get new loans, but there was no new proposal from Athens that its creditors could agree to, an EU official said.

The uncertainty caused U.S. Treasuries yields to fall with benchmark yields retreating from seven-month highs, though they later turned flat.

“The Fed and Greece are the two major themes,” said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.

DOLLAR JITTERS

The dollar dropped 1 percent against a basket of major currencies, extending losses as the day went on, even after Obama denied a Bloomberg report, citing an unnamed French official, that he had called the strong dollar “a problem” in conversation at the Group of Seven (G7) summit in Germany.

Despite the denials, currency investors were wary as Federal Reserve and other U.S. officials have, over the past few months, expressed concerns about the robust greenback’s impact on growth and exports.

“Maybe he didn’t say it, but the report highlighted an undercurrent of discomfort with the level of the dollar and its negative impact on the U.S. economy and the global economy,” Prudential’s Praveen said.

The dollar index was still up 5.7 percent for the year-to-date after a 12.8 percent rise in 2014.

The euro gained 1.4 percent against the dollar Monday, after a 1 percent gain in the prior week.

The MSCI all world share index was down 0.1 percent Monday afternoon. European shares shed 0.9 percent. Shares in Germany’s largest lender, Deutsche Bank , surged almost 4 percent on the appointment of a new CEO.

China’s exports fell less than expected last month, but imports tumbled at a greater pace, stoking speculation that the economy’s slowdown will give Beijing more reason to take further stimulus steps.

The Chinese import figure did little to support an oil market already concerned about oversupply.

Brent crude futures fell 0.73 percent to $62.85 a barrel, after skidding 3.4 percent last week. U.S. crude was down 1.5 percent at $58.22.

Gold edged up slightly after a three-day losing streak, helped by the dollar and equity declines. (Additional reporting by Tanya Agrawal; Richard Leong and Michael Connor; Editing by Bernadette Baum and Nick Zieminski)